Given Michigan’s unique intersection of “No-Fault” auto insurance laws and rigid garnishment reporting rules, it is crucial to partner with a specialist who understands the local Public Health Code. Attempting do-it-yourself collection here doesn’t just risk lower recovery—it risks permanently extinguishing your right to payment under the strict “One-Year Back” rule.
For revenue cycle directors in Michigan—whether you are with a major system like Henry Ford Health or a private practice in Grand Rapids—collecting medical debt requires navigating one of the most complex insurance environments in the country.
If your agency treats a “PIP Claim” the same way they treat a standard “Health Insurance” balance, they aren’t just failing to collect—they are actively letting your legal claim expire. We act as a specialized revenue firewall, protecting you from the administrative traps hidden in Michigan’s statutes.
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Deep Analysis: The Three “Revenue Leaks” in Michigan
Collecting in the Great Lakes State requires a strategy that accounts for specific legislative pitfalls. Here is why standard national agencies fail here:
1. The “One-Year Back” Rule (No-Fault Auto)
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The Law: Under Michigan’s No-Fault Act (MCL 500.3145), you generally have only one year from the date of service to file a lawsuit against an auto insurer for unpaid medical bills.
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The Risk: Many agencies treat auto-accident accounts like standard bad debt, letting them sit in a queue for months. If they wait 12 months and 1 day, your claim is extinguished forever. You cannot sue the insurer, and strict balance-billing rules often prevent you from billing the patient.
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Our Solution: We flag all “MVA” (Motor Vehicle Accident) accounts upon intake. If the Date of Service is approaching the 10-month mark, we expedite the file to our legal team to preserve your rights before the statute expires.
2. The “6-Month Garnishment” Disclosure
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The Law: Michigan allows wage garnishment until the debt is paid (unlike states where it expires quickly). However, there is a catch: The creditor must provide a statement of the remaining balance to the employer and defendant every 6 months.
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The Risk: “Set it and forget it” agencies often fail to send these mandatory updates. This creates a valid defense for the debtor to have the garnishment dismissed and can even compel you to return collected funds.
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Our Solution: Our system automatically generates and mails these 6-month statutory updates, ensuring your revenue stream doesn’t dry up due to a clerical error.
3. The Strict “100-Day” Lien Limit
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The Law: Michigan’s Hospital Lien Act is much tighter than other states. You can only place a lien on a patient’s tort settlement for the first 100 days of treatment (following the accident).
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The Risk: Filing a lien for treatment provided on “Day 101” is legally invalid and can expose your facility to “slander of title” counter-suits.
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Our Solution: We audit your itemized bills before filing any liens. We separate “Lien-Eligible” charges from “Standard Collections” to ensure every legal filing is bulletproof.
Our 4-Step “Great Lakes” Recovery System
We have calibrated our recovery model to fit Michigan’s 6-year statute of limitations for contracts and its specific consumer protections.
Phase 1: The No-Fault Triage (Pre-Collection)
Before we demand payment from a patient, we check the “Financial Class” of the debt.
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Is this an Auto Accident? If yes, we verify if the “One-Year Back” clock is ticking. We don’t harass the patient for a bill that Allstate or State Farm should have paid.
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Cost: Included in service.
Phase 2: The “Statutory Nudge” (Steps 1 & 2)
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The Strategy: We send a series of firm, compliant demands. We reference Michigan’s 6-year Statute of Limitations, reminding debtors that this debt will not simply “go away” quickly (unlike in states with shorter windows like PA or DE).
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The Cost: A simple flat fee (approx. $15/account).
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The Benefit: You clear out the low-hanging fruit—patients who simply forgot to pay—without paying a commission. You keep 100% of these recoveries.
Phase 3: The Wage Lever (Step 3)
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The Strategy: If the patient ignores us, we escalate. Michigan law allows garnishment of up to 25% of disposable earnings.
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The Negotiation: We use this as leverage. “Mr. Jones, a court order could take 25% of your paycheck. Let’s set up a voluntary plan for 10% instead.” This logic works.
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The Cost: 40% contingency.
Phase 4: Litigation & Maintenance (Step 4)
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The Strategy: For high-balance accounts, we file suit in the local District Court. Once we get the judgment, we manage the periodic garnishment process, including the mandatory 6-month balance statements, so you don’t have to track them.
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The Cost: 50% contingency.
Regional Strategy: From Detroit to the U.P.
Michigan is economically diverse. We adjust our tactics based on the patient’s location.
| Region | Economic Profile | Collection Strategy |
| Southeast (Detroit/Wayne Co.) | High Auto Insurance Volume | Heavy focus on “No-Fault” coordination and PIP claim verification. |
| West MI (Grand Rapids) | Medical Manufacturing/Service | Focus on employer benefit verification; higher success with voluntary payment plans. |
| Northern MI / U.P. | Rural/Tourism | We utilize “seasonality” in our calls, knowing cash flow is tighter in winter months for tourism workers. |
FAQ: The Executive Summary
Q: Can you collect on a debt that is 5 years old?
A: Yes. Michigan has a 6-year Statute of Limitations for contract disputes (which covers most medical debt). However, collecting on a 5-year-old debt is difficult. We recommend listing accounts at 90-120 days past due for maximum recovery.
Q: What if the patient claims they have “No-Fault” insurance?
A: We stop and verify immediately. If they were in an accident, their auto insurance is likely the primary payer. We request the claim number and adjuster info to file before the 1-year deadline hits.
Q: Do you report to credit bureaus?
A: We can, but with caution. With state-level discussions (Senate Bill 451) proposing to ban medical debt reporting in Michigan, we are shifting our focus to direct contact and legal recovery rather than relying on credit damage.
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